In this Money Diaries piece, we follow a 30-year-old investment analyst at a large MNC. A passionate advocate for financial freedom and independence as well as an efficient budgeter, he's spent his entire life thinking about how to continuously improve his own financial knowledge and appetite for investing.
Age: 30 years old
Current location: Singapore
Current industry and title: Investment analyst at a large MNC
Cellphone bill: $50
Home: Lives with his parents
Groceries: $20 a week
I shop at NTUC and buy UHT milk mostly because I drink a lot of protein milk, Greek yoghurt, and blueberries. Most people ask me why I don't buy more premium milk but frankly, the taste doesn't really bother me.
Transport: Public transport only. I don't believe in taking cars. I take Grab once or twice a week if it gets too late.
Spotify Premium: $12.90 a month
ViewQwest Internet for the home: $40
I like hawker options. I'll eat fish soup, and try to keep it relatively healthy. I make myself a protein shake with 2 scoops of protein every morning, and buy it on myprotein.com because it's the cheapest. I have 2x10 KG of packets of this at home I bought since buying in bulk saves more money. I do, however, like to meet up with friends and still date from time to time, so meals with these people are around $30-$50 per person. I would say I'm relatively comfortable with this since it's my time to socialise and meet people. Jun Omakase is one of my favourite places. Lunch sets are a great since you get the dinner menu at a lower cost. I like spending with good company.
I've invested in my own gym, and bought most of my equipment at Decathalon. I think it's a better ROI (return on investment) than going to studios, and I check out Youtube videos on calisthenics often. I want to go for professional classes in 2020. It'll probably cost $50 an hour a session, but I plan on setting aside $200 a month to supplement my existing routine. Investing in one's health and wellness is important to me.
Financial tools: Miles management and credit cards
I believe in using miles, so I have 20 credit cards across cashback and miles. I'm really into this – my favourite card is the UOB Preferred Platinum Visa. I do have a quarterly spreadsheet with all the conversions so I keep track of my miles
and rewards. Otherwise, I really only use 6-7 of my cards. The UOB Preferred Platinum Visa is what I use most on a daily basis, but the DBS Woman World card (yes, I am male) is great too. My other major sources of expenditure have been my laptops and computers on these cards, and I don't usually buy very expensive items.
I don't care about budgeting because I am conservative with my spending. I think I need to spend more rather than save more. I save more than 50% of my income. I do think need to live a life but because my life philosophies are like this, they keep me in check.
With the miles I've earned over the course of the year, I've taken quite a few business class trips. I maximise and plan my life around miles usage. I went to HK-Singapore on one leg, Perth return the next, and then from Singapore to Tokyo for less than 100,000 miles on Singapore Airlines. I do mostly touristy things. I also love doing one fine dining experience, will splurge on some alcohol (though I am not a big drinker), and I rarely spend on hotels. I'll always choose somewhere convenient and cheap ?mostly hostels where I'll get to meet fellow travellers, and Airbnb. I travel about 4-5 times a year.
Relationship with money: The art of saving
Growing up, my parents were civil servants. Both of them come from modest families, and they live modestly despite earning more money over the last decade. For me, money is for security, not spending and extravagance. Finance is a means to education and experiences, as opposed to day-to-day spending. For instance, I was able to go to piano classes as a child, and my parents helped me finance my overseas exchange program in the Netherlands while I was in university, so thanks to them and their values, I've always valued things with a long-term impact versus short-term gratification. I've always been saving my money obsessively, even when I was a child. My allowance was $100 a week in University, and I'd say that taught me to save.
My financial education: University and Finance 101
I studied finance in school, and I realised that something that dawned on me back then were that active fund managers (even good ones) weren't able to beat the market consistently. That got me thinking. How much would someone like me really need to earn on my investments to retire comfortably? I was 22 at the time, and I made a spreadsheet to find out what I really needed and realised I only needed a 5% return on my investments to hit my personal financial goals.
Investing outlook: Wealth maximisation
Right now, I'm not just investing for my retirement, but am trying to maximise my wealth, in case I want to start my own business or do something charitable. I don't believe in retirement, but I believe in being emotionally and personally invested in whatever I'm doing at that point in time, even it if means making nothing if I decide to volunteer full time.
Stocks, stocks, stocks, and companies:
I used to love stock picking in university. I would just buy a bunch of REITS. It's a common thing to do and I liked the dividends. It felt good but ultimately, again, I'm not sure if I'm good at it or it was pure dumb luck.
I've worked in big publicly traded companies, and I've now realised that whatever people know about the company outside versus inside is that people are investing in companies that they know nothing about.
It just makes me certain that passive investing gives one more certainty for the future. Share prices of FAANG stock will still be driven by investors and the market, so in that sense, you never really know if you're getting intrinsic value (based on whether it's presented to you as a good buy because it's been approved by analysts) versus what's truly going on on the inside. That means, all we're doing is speculative trading versus passive investing. I invest 2-3 times a month, and I buy ETFs for long-term investment. I choose the funds with the lowest expense ratio and have decent liquidity. I only sell to re-balance my portfolio and I do broad market ETFs. Despite working for large companies, I will not own company shares from now on. My trading platform is Interactive Brokers, as it has the cheapest option and access to cheap ETFs. I highly recommend it.
I give advice. And some.
As a finance aficionado, I am probably the most educated amongst my friends. I usually advise my friends to stay away from insurance agents because of the renumeration structure — they get incentivised for every sale closed rather than based on the quality of their advice, and are essentially salespeople with poor product and investment knowledge. We all deserve better services. As you can tell, I get pretty worked up about this. Why do all of us have to work so hard and know our work so well, but they can get away with obviously poor service and advice?
Financial literacy is power. I hope everyone embraces it.
Indifference and fear-mongering on all channels exist here in Singapore, and then there is poor financial literacy. There is too much noise, and people get confused by differing investment values, buying property, and buying insurance. I often see that people aren't even trying to get their feet wet, and the government doesn't really want to step in to tell people that they should passively invest, which makes this a tricky problem to solve.
Individualism over collectivism:
All in all, I wish that people could invest more like Americans do. Investing in the US is low-cost and convenient and we don't have these options, but I am hopeful that with time and opportunity, we'll get there.
Investment involves risk. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Past performance is not an indicator nor a guarantee of future performance. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endow.us Pte. Ltd (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus Pte. Ltd., its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.